ADM Files 10-Q for Q2 2024

Ticker: ADM · Form: 10-Q · Filed: 2024-07-30T00:00:00.000Z

Sentiment: neutral

Topics: 10-Q, quarterly-report, financials

TL;DR

ADM's Q2 2024 10-Q is in. Check financials.

AI Summary

Archer-Daniels-Midland Co. (ADM) filed its 10-Q for the period ending June 30, 2024. The filing covers financial performance and operations for the second quarter and the first half of the fiscal year. Key financial data and operational details are presented for comparison with prior periods.

Why It Matters

This filing provides investors with the latest financial performance data for Archer-Daniels-Midland, crucial for understanding the company's current health and future prospects.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial information.

Key Numbers

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is the quarter ended June 30, 2024.

When was this 10-Q filed with the SEC?

This 10-Q was filed on July 30, 2024.

What is the company's Central Index Key (CIK)?

The company's Central Index Key (CIK) is 0000007084.

What is Archer-Daniels-Midland Co.'s fiscal year end?

Archer-Daniels-Midland Co.'s fiscal year ends on December 31.

What is the SIC code for Archer-Daniels-Midland Co.?

The Standard Industrial Classification (SIC) code for Archer-Daniels-Midland Co. is 2070 (FATS & OILS).

Filing Stats: 4,721 words · 19 min read · ~16 pages · Grade level 18.4 · Accepted 2024-07-30 16:20:29

Filing Documents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Archer-Daniels-Midland Company Consolidated Statements of Earnings (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (In millions, except per share amounts) Revenues $ 22,248 $ 25,190 $ 44,095 $ 49,262 Cost of products sold 20,852 23,307 41,040 45,299 Gross Profit 1,396 1,883 3,055 3,963 Selling, general, and administrative expenses 907 841 1,858 1,722 Asset impairment, exit, and restructuring costs 7 60 25 67 Equity in earnings of unconsolidated affiliates ( 152 ) ( 151 ) ( 364 ) ( 325 ) Interest and investment income ( 140 ) ( 142 ) ( 263 ) ( 276 ) Interest expense 187 180 353 327 Other (income) expense – net ( 9 ) ( 37 ) ( 35 ) ( 81 ) Earnings Before Income Taxes 596 1,132 1,481 2,529 Income tax expense 115 204 281 429 Net Earnings Including Noncontrolling Interests 481 928 1,200 2,100 Less: Net earnings (losses) attributable to noncontrolling interests ( 5 ) 1 ( 15 ) 3 Net Earnings Attributable to Controlling Interests $ 486 $ 927 $ 1,215 $ 2,097 Average number of shares outstanding – basic 492 545 503 548 Average number of shares outstanding – diluted 493 546 503 549 Basic earnings per common share $ 0.99 $ 1.70 $ 2.42 $ 3.83 Diluted earnings per common share $ 0.98 $ 1.70 $ 2.41 $ 3.82 Dividends per common share $ 0.50 $ 0.45 $ 1.00 $ 0.90 See notes to consolidated financial statements. 3 Archer-Daniels-Midland Company Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (In millions) Net earnings including noncontrolling interests $ 481 $ 928 $ 1,200 $ 2,100 Other comprehensive income (loss): Foreign currency translation adjustment ( 261 ) 35 ( 257 ) 188 Tax effect ( 6 ) 14 ( 26 ) 28 Net of tax amount ( 267 ) 49 ( 283 ) 216 Pension and other postretirement benefit liabilities adjustment ( 3 ) ( 6 ) ( 7 ) ( 32 ) Tax effect 1 4 2 ( 9 ) Net of tax amou

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Note 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023 for Archer-Daniels-Midland Company (the Company or ADM). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company consolidates all entities, including variable interest entities (VIEs), in which it has a controlling financial interest. For VIEs, the Company assesses whether it is the primary beneficiary as defined under the applicable accounting standard. Investments in affiliates, including VIEs through which the Company exercises significant influence but does not control the investee and is not the primary beneficiary of the investee's activities, are carried at cost plus equity in undistributed earnings since acquisition and are adjusted, where appropriate, for basis differences between the investment balance and the underlying net assets of the investee and impairments determined to be other than temporary in nature. The Company's portion of the results o

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 1. Basis of Presentation (Continued) Changes to the allowance for estimated uncollectible accounts were as follows: Three Months Ended June 30 2024 2023 (In millions) Beginning, April 1 $ 216 $ 182 Current year provisions ( 12 ) 9 Write-offs against allowance ( 3 ) ( 16 ) Foreign exchange translation adjustment ( 1 ) — Other ( 6 ) ( 1 ) Ending, June 30 $ 194 $ 174 Six Months Ended June 30 2024 2023 (In millions) Beginning, January 1 $ 215 $ 199 Current year provisions ( 7 ) 13 Recoveries 8 1 Write-offs against allowance ( 16 ) ( 40 ) Foreign exchange translation adjustment — 1 Other ( 6 ) — Ending, June 30 $ 194 $ 174 Current year provisions in the three months ended June 30, 2024 include reversals of prior general provisions for economic factors related to the pandemic. Write-offs against allowance in the three months and six months ended June 30, 2024 were primarily related to trade receivables and long-term receivables, respectively. Write-offs against allowance in the three months ended June 30, 2023 were primarily related to a customer in Brazil. Also included in write-offs against allowance in the six months ended June 30, 2023 was allowance on receivables that were subsequently sold. Inventories Certain merchandisable agricultural commodity inventories, which include inventories acquired under deferred pricing contracts, are stated at market value. In addition, the Company values certain inventories using the first-in, first-out (FIFO) method at the lower of cost or net realizable value. The following table sets forth the Company's inventories as of June 30, 2024 and December 31, 2023. June 30, 2024 December 31, 2023 (In millions) Raw materials and supplies $ 1,787 $ 1,944 Finished goods 2,909 3,026 Market inventories 5,747 6,987 Total inventories $ 10,443 $ 11,957 Included in raw materials and supplies are work in process inventories which were

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 1. Basis of Presentation (Continued) Cost Method Investments Cost method investments of $ 440 million and $ 438 million as of June 30, 2024 and December 31, 2023, respectively, were included in Other Assets in the Company's consolidated balance sheets. Revaluation losses of $ 18 million in the six months ended June 30, 2024 were related to an investment in alternative protein and precision fermentation, partially offset by an upward adjustment of $ 2 million in the six months ended June 30, 2024. There were no revaluation gains or losses in the three and six months ended June 30, 2023. Revaluation gains and losses are recorded in interest and investment income in the Company's consolidated statements of earnings. As of June 30, 2024, the cumulative amounts of upward and downward adjustments were $ 115 million and $ 94 million, respectively. Investments in Affiliates The Company applies the equity method of accounting for investments over which the Company has the ability to exercise significant influence, including its 22.5 % investment in Wilmar International Limited ("Wilmar"). The Company's investment in Wilmar had a carrying value of $ 4.1 billion as of June 30, 2024, and a market value of $ 3.2 billion based on the quoted Singapore Exchange market price converted to U.S. dollars at the applicable exchange rate at June 30, 2024. Wilmar does not have a recent history of operating losses, has positive working capital and positive cash flows and has a long history of paying dividends. A significant portion of the decline in market value of Wilmar based on the quoted Singapore Exchange market price occurred during the quarter ended June 30, 2024. The Company considers its investment in Wilmar a significant and strategic relationship and has the intent and ability to retain its investment in Wilmar for a period of time sufficient to allow for any anticipated recovery in market value.

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues Revenue Recognition The Company principally generates revenue from merchandising and transporting agricultural commodities, and manufacturing products for use in food, beverages, feed, energy, and industrial applications, and ingredients and solutions for human and animal nutrition. Revenue is measured based on the consideration specified in the contract with a customer. The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product or service to a customer. The majority of the Company's contracts with customers have one performance obligation and a contract duration of one year or less. The Company applies the practical expedient in paragraph 10-50-14 of ASC 606, Revenue from Contracts with Customers , (Topic 606) and does not disclose information about remaining performance obligations that have original expected durations of one year or less. For transportation service contracts, the Company recognizes revenue over time as the mode of transportation moves towards its destination in accordance with the transfer of control guidance of Topic 606. The Company recognized revenue from transportation service contracts of $ 252 million and $ 445 million for the three and six months ended June 30, 2024, respectively, and $ 200 million and $ 378 million for the three and six months ended June 30, 2023, respectively. For physically settled derivative sales contracts that are outside the scope of Topic 606, the Company recognizes revenue when control of the inventory is transferred within the meaning of Topic 606 as required by ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20). Shipping and Handling Costs Shipping and handling costs related to contracts with customers for the sale of goods are accounted for as a fulfillment activity and are includ

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) Disaggregation of Revenues The following tables present revenue disaggregated by timing of recognition and major product lines for the three and six months ended June 30, 2024 and 2023. Three Months Ended June 30, 2024 Topic 606 Revenue Topic 815 (1) Total (In millions) Point in Time Over Time Total Revenue Revenues Ag Services and Oilseeds Ag Services $ 925 $ 252 $ 1,177 $ 10,569 $ 11,746 Crushing 104 — 104 2,746 2,850 Refined Products and Other 523 — 523 2,214 2,737 Total Ag Services and Oilseeds 1,552 252 1,804 15,529 17,333 Carbohydrate Solutions Starches and Sweeteners 1,654 — 1,654 557 2,211 Vantage Corn Processors 683 — 683 — 683 Total Carbohydrate Solutions 2,337 — 2,337 557 2,894 Nutrition Human Nutrition 1,061 — 1,061 — 1,061 Animal Nutrition 847 — 847 — 847 Total Nutrition 1,908 — 1,908 — 1,908 Other Business 113 — 113 — 113 Total Revenues $ 5,910 $ 252 $ 6,162 $ 16,086 $ 22,248 12 Archer-Daniels-Midland Company

Notes to Consolidated Financial Statements (Continued)

Notes to Consolidated Financial Statements (Continued) (Unaudited) Note 3. Revenues (Continued) Six Months Ended June 30, 2024 Topic 606 Revenue Topic 815 (1) Total Point in Time Over Time Total Revenue Revenues (In millions) Ag Services and Oilseeds Ag Services $ 1,947 $ 445 $ 2,392 $ 20,551 $ 22,943 Crushing 220 — 220 5,957 6,177 Refined Products and Other 1,070 — 1,070 4,362 5,432 Total Ag Services and Oilseeds 3,237 445 3,682 30,870 34,552 Carbohydrate Solutions Starches and Sweeteners 3,247 — 3,247 1

View on Read The Filing